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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Lgo Energy | LSE:LGO | London | Ordinary Share | GB00BDGJ2R22 | ORD 0.05P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 3.05 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMLGO
RNS Number : 0028L
LGO Energy PLC
28 September 2016
For Immediate Release 28 September 2016
LGO Energy PLC
("LGO" or the "Company")
Unaudited Interim Results for 6 month period ending 30 June 2016
Chief Executive's Review
In the first half of 2016 LGO has remained focussed on its operations in Trinidad and Spain. The Company has also been able to address the financial pressures that resulted from the loan default with BNP Paribas ("BNPP") which followed the sharp fall in oil prices in late 2015. The Company has improved its balance sheet through the reduction of costs, renegotiation of the terms of its bank loan and through making payments to major creditors by way of LGO shares and equity placements. LGO hopes that with renewed financial stability and higher oil prices drilling operations can recommence at the Goudron Field during the second half of the year targeting the underexploited Mayaro Sandstone interval. Preparatory work for the enhanced oil recovery ("EOR") pilot scheme is now also well advanced and it is hoped that that project can be submitted for regulatory approval by year end 2016.
Highlights
For the 6 month Period ending 30 June 2016
OPERATIONAL
-- Group oil sales in the period were 84,470 barrels net to LGO (1H2015: 208,209 barrels)
-- Spanish oil production has been maintained at an average of 132 barrels of oil per day ("bopd") (1H2015: 83 bopd)
-- Four well recompletions; GY-671, GY-50, GY-673 and GY-277, have been successfully carried out at Goudron supporting 1H2016 production which averaged 418 bopd (1H2015: 1,191 bopd)
-- A new updated resource assessment issued in July 2016 for the Goudron Field has increased reserves in all categories, proven, probable and possible, and has increased oil in place to 975 million barrels ("mmbbls")
-- Lower royalty rates have been negotiated to support the Goudron production at oil prices below US$50/bbl, reducing the royalty rate on the majority of barrels produced to below 10%, a reduction of 40% effective from 1st February 2016.
-- Plans for the drilling of the first ten Mayaro Sandstone infill wells now await final approval by the Trinidad authorities
-- An initial pilot EOR scheme has been prepared and is expected to be submitted for regulatory approval before the end of 2016
CORPORATE
-- In the 6 months ending the 30 June, the Company raised a gross amount of GBP5,576,284 through the issue of 2,595,122,080 shares at an average price of 0.215p. Of this total, 425,912,746 shares were issued to suppliers for settlement of creditor balances.
-- After the reporting date, on the 18 August 2016, the Company issued 727,877,588 shares at 0.146p to Well Services Petroleum Company Limited for settlement of creditor balances.
-- On the 22 September, the Company raised GBP795,000 through a placement of 795 million shares at a price of 0.10p for working capital purposes.
-- At the end of Q3, the debt outstanding to BNPP was reduced to US$3m.
FINANCIAL
-- Revenue for period of GBP1,921,000 (1H 2015 GBP6,610,000), an decrease of 71% -- Gross profit for period was a loss of GBP130,000 (1H 2015 a profit of GBP2,062,000)
-- Pre-tax group loss for period of GBP1,925,000 (1H 2015 loss of GBP2,525,000) a 24% improvement.
NOTES
All figures are net to LGO unless otherwise stated.
Trinidad & Tobago
Strategically the Company remains focussed on Trinidad, which represents the majority of near-term activity and significant long-term growth potential, both within existing assets and in additional assets acquired through third-party arrangements or directly from the Trinidad and Tobago government. The Company holds interests in three producing fields; Goudron, Icacos and Bonasse, and in a number of private petroleum leases where production has yet to be established.
Goudron
LGO acquired the rights to the Goudron Field, by way of an Incremental Production Service Contract ("IPSC"), through its wholly owned subsidiary, Goudron E&P Limited ("GEPL"), in October 2012. The Goudron Field lies in the Eastern Fields Area in south eastern onshore Trinidad. Under the terms of the IPSC the Company acts as a service contractor to the Petroleum Company of Trinidad & Tobago ("Petrotrin") who reimburse LGO on the basis of the oil sales and oil price.
The Goudron Field contains two separate reservoir packages; the shallow Mayaro (formally referred to as Goudron) Sandstones and the deeper Grose Morne and Cruse equivalent C-sands. During drilling in 2014 and 2015 a deeper, pre-Cruse, interval of turbidite sands was penetrated and evaluated and this has added an additional, previously unexplored, deep resource for future exploitation.
The Company's plans for the development of the Goudron Field included four distinct phases:
Phase 1: reactivation of existing wells and the repair and replacement of infrastructure
Phase 2: drilling of the deep reservoir (C-sand) to further raise production and establish the basis for an EOR (water flood) project
Phase 3: infill drilling of the shallow reservoir (Goudron or Mayaro Sandstone) and the simultaneous carrying out of a pilot waterflood project in the C-sands
Phase 4: a full-field EOR project depending on results of the pilot scheme
Phases 1 and 2 have been completed and work on Phase 3 is waiting to commence.
During Phase 1 GEPL established a permanent camp, repaired and expanded the oil tank batteries, and repaired and extended the electrical grid and associated roads and bridges. In addition the Company placed on production about 70 of the pre-existing wells dating back to the 1920's. Production was raised from 30 to over 300 bopd, taking LGO Group production over 500 bopd for the first time.
Phase 2 started with the drilling of GY-664 in May 2014 and continued through to October 2015 when GY-678 was drilled and experienced technical problems. A total of 15 new deviated C-sand wells were drilled from a series of newly constructed drilling pads establishing GEPL as one of the most active operators on the island. The average cost of a deviated C-sand well was US$1.5 million. During the drilling of the 2014 and 2015 program data critical to the anticipated EOR project was collected. Production from the field peaked in early 2015 at just over 2,000 bopd.
An infill program of up to 70 Mayaro Sandstone wells has been designed and plans are in place for the first 10 locations. The Company already holds existing regulatory approval for 45 further wells. The average Mayaro Sandstone well will be drilled to a depth between 1,000 and 1,750 feet at an estimated cost of less than US$500,000 per well. This program will be executed using a small footprint heavy workover rig adapted by means of leased equipment to drill simple vertical wells close to the existing infrastructure without the need for extensive pad construction.
In parallel with the Mayaro Sandstone infill drilling program, and as part of Phase 3 of the development, a water injection pilot project has been designed using existing C-sand wells (two injectors and six producers). Permitting of the Pilot EOR is expected to be complete in 2017 at which time, subject to funding, the project will commence. The results of the Phase 3 EOR Pilot will determine the detailed form of the Phase 4 development.
In July, following the end of the reporting period, LGO issued a new updated resource assessment for the Goudron Field. The previous work by LR Senergy in 2015 was integrated with the ongoing studies by LGO and the data from the seven new wells acquired in 2015. The analysis was independently audited by Deloitte's Resource Evaluation & Advisory team in Alberta, Canada ("Deloitte"). As announced on 18 July, volumes in all reserves categories, proven, probable and possible, have increased, as well as the estimated oil in place within the field which has risen by over 20 percent. Estimated oil initially in place ("STOIIP") within the field has increased since the 2015 independent review and is now reported to be up to 975 mmbbls. The majority of the 21% increase relates to a thickening of the C-sand and pre-Cruse reservoir unit which is observed in logs of wells drilled during the 2015 campaign, notably well GY-678. The increased STOIIP is especially important in the context of a waterflood enhanced oil recovery ("EOR") project at Goudron which is currently at a planning stage. The present Deloitte report includes a gross 3C estimate of 63.40 mmbbls, which is very close to the 2012 estimate and again confirms the significant potential of the planned EOR phase of the field development.
Proved (1P) gross oil reserves in the Mayaro Sandstone and C-sand reservoirs has increased by 3% to 1.58 mmbbls, which when adjusted for the oil produced in the period (240,000 barrels), represents a 22% increase in proven reserves when compared to the June 2015 resource report. The gross proven and probable reserves (2P) have increased by 4% to 11.79 mmbbls. Proved, probable and possible reserves (3P) have increased by 9% to 25.60 mmbbls.
Table 1: Goudron Reserves and Contingent Resources (mmbbls)
Hot Features
Premium
Reserves Contingent Resources
-------- ----------------------------------- ---------------------------------------------
mmbbls Proved Proved Proved + Low Estimate Best Estimate High Estimate
+ probable probable
+ possible
-------- ------- ------------ ------------ ------------- -------------- --------------
Total
Oil 1.580 11.791 25.598 3.150 22.20 63.40
-------- ------- ------------ ------------ ------------- -------------- --------------
Deloitte CPR, April 2016
The Company was severely constrained as to the deployment of capital in the field following GY-678 and the oil price collapse in late 2015, and until April 2016 production levels dropped across all well types, old and new. The Company has more recently been able to invest in a number of low cost recompletions, and an active well maintenance campaign as oil prices rose and stabilized in the range of US$40 to US$50/barrel. Furthermore, the Company had also negotiated a significant reduction in the overriding royalty by Petrotrin at lower oil prices for production above 150 bopd, further improving the margin to support operations in the Goudron Field.
A number of wells were selected for additional perforating. The first five, GY-671, GY-50, GY-673, GY-277 and GY-668, have now been worked over and placed on pumped production. Additional investment will enable further low cost production uplift from legacy and recent wells, and the results of that program will be announced on an ongoing basis through the remainder of 2016.
Drilling of the first of the Mayaro Sandstone infill targets, as part of the originally planned Phase 3 development, is hoped to commence before year end.
South West Peninsula
Through its local subsidiary, Leni Trinidad Limited ("LTL"), LGO holds a 50% interest in the producing Icacos Oil Field in the South West Peninsula ("SWP") where production has been maintained at roughly 35 bopd gross. LTL also holds a 25% shareholding in Beach Oil Field Limited ("BOLT") acquired in October 2015. BOLT operates the Bonasse Field in the South West Peninsula where production remains low pending further work. LTL holds an exclusivity agreement with BOLT on acquiring all BOLT's deep rights in the SWP; that exclusivity has been extended by mutual agreement until 31 March 2017 pending award by the Trinidad and Tobago Ministry of Energy and Energy Industries ("MOEEI") of a renewal of the relevant private petroleum licence ("PPL").
Operations have been restricted to routine well maintenance at the Icacos Field in 2016 in order to maintain production at current levels. An application to the MOEEI for a new PPL has been made for the Icacos Field and is a pre-requisite for further development work to commence. An extension of the PPL covering the Bonasse leases has also been applied for with the MOEEI prior to commencing additional work, including drilling additional wells, to raise production levels.
LGO also holds, through LTL, a number of 100% owned private petroleum leases totalling approximately 1,750 acres, and the Company is in the process of obtaining a PPL from the MOEEI in order to finalise ongoing field survey activities with a view to drilling exploration wells at some point in the future.
A number of significant prospects for oil and gas have been identified in the South West Peninsula acreage using a combination of data acquired from BOLT and integrated with a proprietary soil geochemistry survey as well as the LTL sponsored Full Tensor Gravity survey acquired in 2015. Future drilling of the various shallow and deep prospects now depends on completion of the licensing process currently with the MEEI for consideration.
Spain
LGO holds 100% ownership through its wholly owned subsidiary, Compañia Petrolifera de Sedano ("CPS"), in the La Lora Production Concession ("La Lora") which contains the producing Ayoluengo Oilfield in northern Spain. An application for the production of oil from the nearby Hontomin discovery within the Huermeces permit was made some time ago and is pending award. The award of an economically viable production concession at the Hontomin Field is dependent on the Ayoluengo oil field facilities remaining in place.
The current 50-year La Lora concession expires at the end of January 2017 after which, so long as the Ayoluengo Field is still producing and a number of other conditions are met, the concession can be renewed for one, or potentially two, further 10-year periods. In August 2015 a full application for the renewal of La Lora was filed with the relevant authorities in Spain and the management remain confident that the concession will be renewed. That application is currently awaiting final review by the Spanish Council of State, however, due to the lack of a government in Spain throughout 2016 and with no sign of change in the short term, it is possible that the decision may not be finalised before January. In the event that the application is not processed by January 2017 LGO is preparing to provide for transition arrangements for the field operations to continue until such time as the application can be duly considered by the relevant government bodies.
Initial post-renewal work plans include the side-tracking of a number of existing wells into areas of the reservoir believed to contain unswept oil based on extensive studies of the well and 3D seismic data. The combination of new well bores into areas of unswept oil is anticipated to provide significant production uplift.
The Company currently maintains a regular well intervention programme using a combination of hot oil, xylene and
acid, which continues to provide improvements in production of these mature, active wells. These interventions, using the Company owned Cardwell work-over rig, have continued throughout 2016 to optimise production whilst limiting operating costs.
Oil sales in 2015 were made exclusively to Saint-Gobain Vicasa SA ("Saint-Gobain") under a contract renewed in 2012 and again in September 2015. This contract was terminated by Saint-Gobain in late 2015 due to a change in ownership of the main recipient factory. Notwithstanding the contract termination oil has continued to be purchased by the factory and arrangements are in place to continue with this arrangement on a month by month basis.
During 2016 with oil prices at record lows and restricted off-take from Saint-Gobain, CPS has built up additional oil in storage and it has recently started to market a bulk cargo of up to approximately 10,000 barrels of oil. Storage capacity at Ayoluengo is currently limited to approximately 16,000 barrels, but can be expanded should market conditions favour the continuing retention of high levels of stock.
In 2015 CPS also renewed its long-term contractual arrangements to supply the BP España Castellon refinery under certain conditions that may be met once new investments have been made following the renewal of the La Lora concession.
Due to a lack of access in some areas covered by national parks and a reduced interest in exploration, CPS is in the process of relinquishing the exploration permits held in Northern Spain and is seeking the return of performance guarantees associated with these permits from the Spanish authorities. It is anticipated that process will complete in 2017.
Outlook
The Company continues to focus on the long-term value of the significant potential in its portfolio, most notably at Goudron, Ayoluengo and in the South West Peninsula, whilst continuing to maintain short-term capital discipline. Operations at the Goudron Field continue, and despite the reduced new well drilling activity levels, the Company has accelerated routine maintenance operations and completed four low cost recompletions. Plans are in place to commence the drilling of a number of shallow Mayaro Sandstone infill wells when capital permits.
Whilst the debt remains at call and on demand, it is now reduced to US$3 million and LGO is considering opportunities to refinance the BNPP liability with a view to enabling greater amounts of capital to be applied across the range of production enhancement opportunities at the Goudron Field.
Safe and environmentally sound onshore production operations where there are proven reserves will remain central to the Company's long-term growth proposition.
Neil Ritson
Chief Executive Officer
27 September 2016
Enquiries:
LGO Energy plc +44 (0) 203 794 9230 Neil Ritson Fergus Jenkins Beaumont Cornish Limited +44 (0) 20 7628 3396 Nomad Roland Cornish Rosalind Hill Abrahams FirstEnergy Capital LLP +44 (0) 20 7448 0200 Joint Broker Jonathan Wright David van Erp Bell Pottinger +44 (0) 20 3772 2500 Financial PR Henry Lerwill
GLOSSARY & NOTES
AIM London Stock Exchange Alternative Investment
Market
barrel or 45 US gallons
bbl
bbls barrels of oil
best estimate the most likely estimate of a parameter
or P50 based on all available data, also often
termed the P50 (or the value of a probability
distribution of outcomes at the 50% confidence
level)
BNPP BNP Paribas
BOLT Beach Oilfield Limited
bopd barrels of oil per day
C-sand sandstone reservoirs below the pre-Mayaro
unconformity and above the pre-Lower
Cruse unconformity encompassing sandstones
of equivalent age to both the Gros Morne
and the Lower Cruse formations
CESL Columbus Energy Services Limited
CPR Competent Persons Report
CPS Compañia Petrolifera de Sedano
EOR enhanced oil recovery
FTG Full Tensor Gravity Gradiometry. Full
tensor gradiometers measure the rate
of change of the gravity vector in all
three perpendicular directions
GEPL Goudron E&P Limited
Goudron Sandstone reservoir sands above the pre-Mayaro
unconformity, also known as the Mayaro
Sandstone
IPSC incremental production service contract
La Lora La Lora Production Concession in Spain
LTL Leni Trinidad Limited
Mayaro Sandstone reservoir sands above the pre-Mayaro
unconformity, also known as the Goudron
Sandstone
MOEEI Trinidad and Tobago Ministry of Energy
and Energy Industries (formally the Ministry
of Energy and Energy Affairs, MOEEA)
m thousand
mm million
mmbbls million barrels of oil
Saint-Gobain Saint-Gobain Vicasa SA
STOIIP or stock tank oil initially in place, those
oil in place quantities of oil that are estimated
to be in known reservoirs prior to production
commencing
Petrotrin The Petroleum Company of Trinidad and
Tobago Limited
PPL private petroleum rights license
sidetrack an additional or replacement well bore
created from an existing well bore at
a depth below the surface casing
WTI West Texas Intermediate; oil price marker
crude
The estimates provided in this statement are based on the Petroleum Resources Management System ("PRMS") published by the Society of Petroleum Engineers ("SPE") and are reported consistent with the SPE's 2011
guidelines. All definitions used in the announcement have the meaning given to them in the PRMS.
Qualified Person's statement:
The information contained in this announcement has been reviewed and approved by Neil Ritson, Executive Director for LGO Energy plc. Mr Ritson is a member of the Society of Petroleum Engineers, a Fellow of the Geological Society and an Active Member of the American Association of Petroleum Geologists. Mr Ritson has over 38 years of relevant experience in the oil industry
FINANCIAL STATEMENTS
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE INTERIM PERIODED 30 JUNE 2016
Six months to Six months to Year ended
30 June 2016 30 June 2015 31 December 2015 (Audited)
(Unaudited) (Unaudited)
Notes GBP 000's GBP 000's GBP 000's
Revenue 1,921 6,610 9,475
Cost of sales * (2,051) (4,548) (9,808)
-------------- -------------- ----------------------------
Gross profit (130) 2,062 (333)
Administrative expenses (1,659) (2,475) (4,196)
Amortisation and depreciation (500) (785) (1,732)
Exceptional item ** 444 - (2,515)
-------------- -------------- ----------------------------
Loss from operations (1,845) (1,198) (8,776)
Finance charges *** (80) (1,327) (240)
Impairment charge - - (2,457)
-------------- -------------- ----------------------------
Loss before taxation (1,925) (2,525) (11,473)
Income tax credit/(expense) - (117) 930
-------------- -------------- ----------------------------
Loss for the period (1,925) (2,642) (10,543)
-------------- -------------- ----------------------------
Other comprehensive income
Exchange differences on translation of foreign
operations 1,534 (898) 23
-------------- -------------- ----------------------------
Other comprehensive income for the period net
of taxation 1,534 (898) 23
-------------- -------------- ----------------------------
Total comprehensive income for the period
attributable to equity holders of the parent (391) (3,540) (10,520)
-------------- -------------- ----------------------------
Loss per share (pence)
Basic 3 (0.05) (0.09) (0.35)
Diluted 3 (0.05) (0.09) (0.35)
* During the six month period ended 30 June 2016, cost of sales included the depreciation of specific oil and gas assets of GBP680,000 (year ended 31 December 2015: GBP3,474,000).
** During the six month period ended 30 June 2016, costs in relation to the abandoned well that were expensed during the year ended 31 December 2015 were adjusted, as a result of a negotiated settlement agreed with a creditor.
*** During the six month period ended 30 June 2015, finance charges included an unrealised fair value loss of GBP730,000 in relation to the BNPP loan facility.
GROUP STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
As at 30 June 2016 As at 30 June 2015 As at 31 December 2015
(Unaudited) (Unaudited) (Audited)
Notes GBP 000's GBP 000's GBP 000's
Assets
Non-current assets
Goodwill 4 - 3,083 -
Intangible evaluation assets 4 12,209 11,949 11,477
Oil and gas assets 5 14,827 14,221 14,754
Property, plant and equipment 5 2,735 2,377 2,690
Investment in associate 36 - 34
Total non-current assets 29,807 31,630 28,955
Current assets
Inventories 522 426 309
Trade and other receivables 2,650 2,603 2,475
Cash and cash equivalents 1,170 9,468 4,127
Total current assets 4,342 12,497 6,911
------------------- ------------------- -----------------------
Total assets 34,149 44,127 35,866
------------------- ------------------- -----------------------
Liabilities
Current liabilities
Trade and other payables (4,215) (5,377) (6,212)
Borrowings (2,340) (2,811) (7,006)
Taxation - - (20)
Deferred consideration (120) (120) (120)
Total current liabilities (6,675) (8,308) (13,358)
Non-current liabilities
Borrowings (242) (5,850) (246)
Deferred consideration - (1,233) -
Deferred taxation - (1,096) -
Provisions (1,130) (895) (1,011)
------------------- ------------------- -----------------------
Total non-current liabilities (1,372) (9,074) (1,257)
------------------- ------------------- -----------------------
Total liabilities (8,047) (17,382) (14,615)
------------------- ------------------- -----------------------
Net assets 26,102 26,745 21,251
------------------- ------------------- -----------------------
Shareholders' equity
Called-up share capital 6 2,930 1,525 1,632
Share premium 60,508 55,185 56,564
Share based payments reserve 1,309 1,309 1,309
Retained earnings (43,967) (34,423) (42,156)
Revaluation surplus 3,237 3,519 3,351
Foreign exchange reserve 2,085 (370) 551
------------------- ------------------- -----------------------
Total equity attributable to equity
holders of the parent 26,102 26,745 21,251
------------------- ------------------- -----------------------
GROUP STATEMENT OF CASH FLOW
FOR THE INTERIM PERIODED 30 JUNE 2016
Six months to Six months to Year ended
30 June 2016 30 June 2015 31 December 2015
(Unaudited) (Unaudited) (Audited)
GBP 000's GBP 000's GBP 000's
Cash outflow from operating activities
Operating (loss) (1,845) (1,198) (8,776)
(Increase) /decrease in trade and other receivables (175) 200 (279)
Increase/(decrease) in trade and other payables (1,987) 46 1,057
(Increase)/decrease in inventories (213) (123) (6)
Depreciation 985 1,443 4,496
Amortisation 195 152 710
Net cash inflow/(outflow) from operating activities (3,040) 520 (2,798)
Cash flows from investing activities
Payment to acquire associate - - (34)
Payments to acquire intangible assets (1) (1,192) (833)
Payments to acquire tangible assets (174) (3,892) (7,202)
Net cash (outflow) from investing activities (175) (5,084) (8,069)
-------------- -------------- -------------------
Cash flows from financing activities
Issue of ordinary share capital 5,576 8,296 9,853
Share issue costs (334) (387) (458)
Finance charges paid (9) (132) (262)
Repayment of borrowings (5,461) (3,552) (4,224)
Proceeds from borrowings - 8,171 8,511
Net cash inflow from financing activities (228) 12,396 13,420
-------------- -------------- -------------------
Net increase/(decrease) in cash and cash equivalents (3,443) 7,832 2,553
Foreign exchange differences on translation 486 53 (9)
Cash and cash equivalents at beginning of period 4,127 1,583 1,583
-------------- -------------- -------------------
Cash and cash equivalents at end of period 1,170 9,468 4,127
-------------- -------------- -------------------
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE INTERIM PERIODED 30 JUNE 2016
Called up Share Share based Retained Foreign Revaluation Total Equity
share premium payments earnings exchange surplus
capital reserve reserve reserve
GBP 000's GBP000's GBP 000's GBP 000's GBP 000's GBP 000's GBP 000's
As at 31
December 2014 1,364 47,437 1,296 (32,169) 528 3,907 22,363
------------- ------------- ------------ ------------- ------------ ------------- -------------
Loss for the
period - - - (2,642) - - (2,642)
Revaluation
surplus
amortisation 388 (388) -
Currency
translation
differences - - - - (898) - (898)
------------- ------------- ------------ ------------- ------------ ------------- -------------
Total
comprehensive
income - - - (2,254) (898) (388) (3,540)
Share capital
issued 161 8,135 - - - - 8,296
Cost of share
issue - (387) - - - - (387)
Share based
payments - - 13 - - - 13
------------- ------------- ------------ ------------- ------------ ------------- -------------
Total
contributions
by and
distributions
to owners of
the Company 161 7,748 13 - - - 7,922
------------- ------------- ------------ ------------- ------------ ------------- -------------
As at 30 June
2015 1,525 55,185 1,309 (34,423) (370) 3,519 26,745
------------- ------------- ------------ ------------- ------------ ------------- -------------
As at 31
December 2014 1,364 47,437 1,296 (32,169) 528 3,907 22,363
------------- ------------- ------------ ------------- ------------ ------------- -------------
Loss for the
year - - - (10,543) - - (10,543)
Revaluation
surplus
amortisation - - - 556 - (556) -
Currency
translation
differences - - - - 23 - 23
------------- ------------- ------------ ------------- ------------ ------------- -------------
Total
comprehensive
income - - - (9,987) 23 (556) (10,520)
Share capital
issued 268 9,585 - - - - 9,853
Cost of share
issue - (458) - - - - (458)
Share based
payments - - 13 - - - 13
------------- ------------- ------------ ------------- ------------ ------------- -------------
Total
contributions
by and
distributions
to owners of
the Company 268 9,127 13 - - - 9,408
As at 31
December 2015 1,632 56,564 1,309 (42,156) 551 3,351 21,251
------------- ------------- ------------ ------------- ------------ ------------- -------------
Loss for the
period - - - (1,925) - - (1,925)
Revaluation
surplus
amortisation - - - 114 - (114) -
Currency
translation
differences - - - - 1,534 - 1,534
------------- ------------- ------------ ------------- ------------ ------------- -------------
Total
comprehensive
income - - - (1,811) 1,534 (114) (391)
Share capital
issued 1,298 4,278 - - - - 5,576
Cost of share
issue - (334) - - - - (334)
Share based
payments - - - - - - -
------------- ------------- ------------ ------------- ------------ ------------- -------------
Total
contributions
by and
distributions
to owners of
the Company 1,298 3,944 - - - - 5,242
------------- ------------- ------------ ------------- ------------ ------------- -------------
As at 30 June
2016 2,930 60,508 1,309 (43,967) 2,085 3,237 26,102
------------- ------------- ------------ ------------- ------------ ------------- -------------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE INTERIM PERIODED 30 JUNE 2016
1. Basis of preparation
The financial information has been prepared under the historical cost convention and on a going concern basis and in accordance with International Financial Reporting Standards and IFRIC interpretations adopted for use in the European Union ("IFRS") and those parts of the Companies Act 2006 applicable to companies reporting under IFRS.
The financial information for the period ended 30 June 2016 has not been audited or reviewed in accordance with the International Standard on Review Engagements 2410 issued by the Auditing Practices Board. The figures were prepared using applicable accounting policies and practices consistent with those adopted in the statutory accounts for the period ended 31 December 2015. The figures for the period ended 31 December 2015 have been extracted from these accounts, which have been delivered to the Registrar of Companies, and contained an unqualified audit opinion.
The financial information contained in this document does not constitute statutory accounts. In the opinion of the directors the financial information for this period fairly presents the financial position, result of operations and cash flows for this period.
This Interim Financial Report was approved by the Board of Directors on 27 September 2016.
Statement of compliance
These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard ('IAS') 34 - Interim Financial Reporting as adopted by the European Union. Accordingly the interim financial statements do not include all of the information or disclosures required in the annual financial statements.
Basis of consolidation
The consolidated financial statements comprise the financial statements of LGO Energy Plc and its controlled entities. The financial statements of controlled entities are included in the consolidated financial statements from the date control commences until the date control ceases.
The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies.
All inter-company balances and transactions have been eliminated in full.
Foreign currencies
The functional currency of each entity is determined after consideration of the primary economic environment of the entity. The group's presentational currency is Sterling.
2. Segmental analysis
Corporate Operating Operating Non-operating Total
Six months 1 January 2016 to UK Spain Trinidad
30 June 2016 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Operating profit/(loss) by geographical area
Revenue - 467 1,454 - 1,921
--------- --------- --------- ------------- -------
Operating (loss)/profit * (655) (78) (1,102) (10) (1,845)
Finance charges - - (80) - (80)
--------- --------- --------- ------------- -------
Profit/(loss) before taxation (655) (78) (1,182) (10) (1,925)
--------- --------- --------- ------------- -------
Other information
Depreciation and amortisation (42) (92) (1,046) - (1,180)
Capital additions - 10 165 - 175
--------- --------- --------- ------------- -------
Segment assets
Non-current assets 283 8,281 21,243 - 29,807
Trade and other receivables 543 239 1,868 - 2,650
Inventories - 333 189 - 522
Cash 701 12 447 10 1,170
--------- --------- --------- ------------- -------
Consolidated total assets 1,527 8,865 23,747 10 34,149
--------- --------- --------- ------------- -------
Segment liabilities
Trade and other payables (316) (282) (3,605) (12) (4,215)
Deferred taxation - - - - -
Borrowings - - (2,582) - (2,582)
Deferred consideration (120) - - - (120)
Provisions - (791) (339) - (1,130)
--------- --------- --------- ------------- -------
Consolidated total liabilities (436) (1,073) (6,526) (12) (8,047)
--------- --------- --------- ------------- -------
* Operating (loss)/profit includes management fee income/expenses charged by the Company to its subsidiaries.
2. Segmental analysis (continued)
Corporate Holding Holding Operating Operating Corporate Total
Six months 1 January 2015 to UK Cyprus St Lucia Spain Trinidad US
30 June 2015 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Operating profit/(loss) by geographical area
Revenue - - - 543 6,067 - 6,610
--------- ------- -------- --------- --------- --------- --------
Operating (loss)/profit (789) (116) (3) (291) 2 (1) (1,198)
Finance charges (121) - - - (1,206) - (1,327)
--------- ------- -------- --------- --------- --------- --------
Profit/(loss) before taxation (910) (116) (3) (291) (1,204) (1) (2,525)
--------- ------- -------- --------- --------- --------- --------
Other information
Depreciation and amortisation (18) - - (70) (1,507) - (1,595)
Capital additions 273 - - 140 4,739 - 5,152
--------- ------- -------- --------- --------- --------- --------
Segment assets
Non-current assets 3,339 - - 7,809 20,482 - 31,630
Trade and other receivables 430 - - 247 1,926 - 2,603
Inventories - - - 102 324 - 426
Cash 851 - 16 60 8,541 - 9,468
--------- ------- -------- --------- --------- --------- --------
Consolidated total assets 4,620 - 16 8,218 31,273 - 44,127
--------- ------- -------- --------- --------- --------- --------
Segment liabilities
Trade and other payables (675) - (2) (200) (4,500) - (5,377)
Deferred taxation - - - - (1,096) - (1,096)
Borrowings - - - - (8,661) - (8,661)
Deferred consideration (1,353) - - - - - (1,353)
Provisions - - - (673) (222) - (895)
--------- ------- -------- --------- --------- --------- --------
Consolidated total liabilities (2,028) - (2) (873) (14,479) - (17,382)
--------- ------- -------- --------- --------- --------- --------
2. Segmental analysis (continued)
Corporate Operating Operating Non-operating Total
Year ended UK Spain Trinidad
31 December 2015 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Operating profit/(loss) by geographical area
Revenue - 1,112 8,363 - 9,475
---------- ---------- ---------- -------------- ---------
Operating (loss)/profit (1,380) (1,093) (6,158) (145) (8,776)
Loan impairment - - - - -
Asset Impairment (1,850) - (607) - (2,457)
Finance charges (123) - (117) - (240)
Profit/(loss) before taxation (3,353) (1,093) (6,882) (145) (11,473)
---------- ---------- ---------- -------------- ---------
Other information
Depreciation and amortisation (57) (582) (4,567) - (5,206)
Capital additions 381 220 7,434 - 8,035
---------- ---------- ---------- -------------- ---------
Segment assets
Non-current assets 325 7,631 20,999 - 28,955
Trade and other receivables 437 96 1,942 - 2,475
Inventories - 135 174 - 309
Cash 406 159 3,554 8 4,127
---------- ---------- ---------- -------------- ---------
Consolidated total assets 1,168 8,021 26,669 8 35,866
---------- ---------- ---------- -------------- ---------
Segment liabilities
Trade and other payables (450) (270) (5,480) (12) (6,212)
Taxation - - - (20) (20)
Borrowings - - (7,252) - (7,252)
Deferred consideration (120) - - - (120)
Provisions - (703) (308) - (1,011)
---------- ---------- ---------- -------------- ---------
Consolidated total liabilities (570) (973) (13,040) (32) (14,615)
---------- ---------- ---------- -------------- ---------
3. Loss per share
The calculation of loss per share is based on the loss after taxation divided by the weighted average number of share in issue during the period.
Six months to Six months to Year ended
30 June 2016 30 June 2015 31 December 2015
(Unaudited) (Unaudited) (Audited)
Loss after taxation (GBP000's) (1,925) (2,642) (10,542)
Weighted average number of ordinary shares used in calculating
basic loss per share (millions) 4,232 2,965 3,044
Weighted average number of ordinary shares used in calculating
diluted loss per share (millions) 4,524 3,263 3,343
Basic loss per share (pence) (0.05) (0.09) (0.35)
Diluted loss per share (pence) (0.05) (0.09) (0.35)
As the inclusion of the potential issuable ordinary shares would result in a decrease in the loss per share, they are considered to be anti-dilutive and as such, a diluted earnings per share is not included.
4. Intangible evaluation assets
Intangible evaluation assets Software Goodwill Total
GBP000's GBP000's GBP000's GBP000's
Cost
As at 31 December 2014 14,047 - 3,083 17,130
Adjustment - - (1,233) (1,233)
Additions 700 133 - 833
Foreign exchange differences on translation (324) - - (324)
----------------------------- --------- --------- ---------
As at 31 December 2015 14,423 133 1,850 16,406
Additions 1 - - 1
Foreign exchange differences on translation 1,256 - - 1,256
As at 30 June 2016 15,680 133 1,850 17,663
----------------------------- --------- --------- ---------
Amortisation and impairment
As at 31 December 2014 2,461 - - 2,461
Amortisation 692 18 - 710
Impairment - - 1,850 1,850
Foreign exchange differences on translation (92) - - (92)
----------------------------- --------- --------- ---------
As at 31 December 2015 3,061 18 1,850 4,929
Amortisation 178 17 - 195
Foreign exchange differences on translation 330 - - 330
----------------------------- --------- --------- ---------
As at 30 June 2016 3,569 35 1,850 5,454
----------------------------- --------- --------- ---------
Net book value
As at 30 June 2016 12,111 98 - 12,209
----------------------------- --------- --------- ---------
As at 31 December 2015 11,362 115 - 11,477
----------------------------- --------- --------- ---------
As at 31 December 2014 11,586 - 3,083 14,669
----------------------------- --------- --------- ---------
5. Property, plant and equipment
Oil and gas assets Property, plant and Decommissioning costs Total
equipment
GBP 000's GBP 000's GBP 000's GBP 000's
Cost
As at 31 December 2014 13,348 2,403 905 16,656
Additions 6,355 706 141 7,202
Foreign exchange differences
on translation 351 13 (35) 329
------------------- ----------------------------- ---------------------- ----------
As at 31 December 2015 20,054 3,122 1,011 24,187
Additions 142 32 - 174
Foreign exchange differences
on translation 1,046 232 108 1,386
------------------- ----------------------------- ---------------------- ----------
As at 30 June 2016 21,242 3,386 1,119 25,747
------------------- ----------------------------- ---------------------- ----------
Depreciation
As at 31 December 2014 1,175 945 41 2,161
Depreciation 4,030 415 51 4,496
Foreign exchange differences
on translation 95 (7) (2) 86
------------------- ----------------------------- ---------------------- ----------
As at 31 December 2015 5,300 1,353 90 6,743
Depreciation 793 175 17 985
Foreign exchange differences
on translation 322 123 12 457
------------------- ----------------------------- ---------------------- ----------
As at 30 June 2016 6,415 1,651 119 8,185
------------------- ----------------------------- ---------------------- ----------
Net book value
As at 30 June 2016 14,827 1,735 1,000 17,562
------------------- ----------------------------- ---------------------- ----------
As at 31 December 2015 14,754 1,769 921 17,444
------------------- ----------------------------- ---------------------- ----------
As at 31 December 2014 12,173 1,458 864 14,495
------------------- ----------------------------- ---------------------- ----------
6. Called up share capital
Called up, allotted, issued and fully paid Number of shares Nominal value (GBP000's)
As at 31 December 2014 2,728,840,849 1,364
15 January 2015 for cash at 3.00p per share 52,500,000 27
23 February 2015 for cash at 2.50p per share 96,062,500 48
24 February 2015 for cash at 2.50p per share 172,760,000 85
As at 30 June 2015 3,050,163,349 1,524
----------------- -------------------------
9 July 2015 consideration at 3.30p per share 3,889,697 2
5 October 2015 cash at 0.90p per share 111,111,110 56
12 October 2015 consideration at 0.90p per share 14,679,556 7
8 December 2015 consideration at 0.43p per share 41,487,776 21
14 December 2015 consideration at 0.28p per share 43,668,470 22
----------------- -------------------------
As at 31 December 2015 3,264,999,958 1,632
----------------- -------------------------
22 January 2016 consideration at 0.23p per share 28,848,519 14
16 March 2016 cash at 0.25p per share 424,209,334 212
16 March 2016 consideration at 0.25p per share 235,995,235 118
18 April 2016 cash at 0.25p per share 120,000,000 60
4 May 2016 cash at 0.20p per share 1,625,000,000 813
9 June 2016 consideration at 0.19p per share 161,068,992 81
----------------- -------------------------
As at 30 June 2016 5,860,122,038 2,930
----------------- -------------------------
During the period, 2,595.1 million shares were issued (year ended 31 December 2015: 536.2 million).
Total share options in issue
Exercise price Vesting criteria Expiry date Number of options
1.00p - 31 December 2020 56,000,000
1.00p 500 bopd 31 December 2020 49,333,333
1.00p 600 bopd 31 December 2020 49,333,333
1.00p 700 bopd 31 December 2020 49,333,334
4.00p 1,250 bopd 31 December 2020 16,250,000
4.00p 1,500 bopd 31 December 2020 45,000,000
4.00p 1,750 bopd 31 December 2020 16,250,000
------------------
As at 30 June 2016 281,500,000
------------------
During the period, no options were issued (year ended 31 December 2015: nil). No options were exercised (year ended 31 December 2015: nil), lapsed (year ended 31 December 2015: nil) or cancelled (year ended 31 December 2015: nil).
Total warrants in issue
Exercise price Expiry date Number of warrants
4.50p 25 June 2017 4,081,802
6.20p 15 October 2017 2,158,692
5.10p 22 December 2017 3,931,838
4.20p 16 January 2018 4,915,084
2.50p 23 February 2018 2,688,225
As at 30 June 2016 17,775,641
-------------------
During the period, no warrants were issued (year ended 31 December 2015: 7.6 million). No warrants were exercised (year ended 31 December 2015: nil), lapsed (year ended 31 December 2015: nil) or cancelled (year ended 31 December 2015: nil).
7. Events after the reporting date
On 18(th) August 2016, the Company announced the issue of 727,877,588 new ordinary shares of 0.05p each at a price of 0.1463p to Well Services Petroleum Company Limited ("Well Services"), a creditor of Goudron E & P Ltd, a subsidiary of the Company, as consideration for outstanding fees for services provided of US$1,379,331.
On 22(nd) September 2016, the Company raised GBP795,000 before expenses through a placement of 795,000,000 new ordinary shares of 0.05p each at a price of 0.10p.
8. The financial information set out above does not constitute the Group's statutory accounts for the period ended 31 December 2015, but is derived from those accounts.
9. A copy of this interim statement is available on the Company's website: www.lgo-energy.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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